What is an IVA?

In order to comprehend the reason behind an IVA showing up on your credit report, it is essential to grasp the concept of an IVA and its functioning.

An IVA, or Individual Voluntary Arrangement, is a legally binding contract between you and your creditors, enabling you to pay off your debts through affordable monthly instalments based on your income.

Although an IVA does not eliminate your debts entirely, it allows you to be officially discharged from them and deemed debt-free once the IVA term concludes, provided you have met your obligations and completed the specified monthly payments as outlined in your proposal.

At IVA Helpline, we aim to assist you in understanding the intricacies of IVAs and their impact on your financial situation. Our guidance will help you navigate the challenges and benefits associated with this debt management solution, ensuring you make informed decisions regarding your financial future.

How does an IVA affect my credit score?

While an IVA remains on your credit file, it negatively impacts your credit score and ability to obtain credit, even if you previously had a good credit rating.

When evaluating credit applications, lenders consider various factors, including your credit history and score. Although an IVA on your credit file indicates to lenders that you’re actively repaying outstanding debts, it also signifies past payment failures and potential future missed payments.

Additionally, your IVA details will be recorded on a public register called the Individual Insolvency Register, which is freely accessible online. However, as it is primarily used by lenders and credit reference agencies, it is improbable that your friends, family, or colleagues will view your information.

Can I get an IVA removed from my credit file?

An IVA cannot be removed from your credit file before the completion of its six-year term, even if the debt has been repaid early or through a single lump sum payment. Upon repayment, the status will change from ‘active’ to ‘complete.’ Generally, an IVA is automatically removed from your credit record after six years, and no further action is required on your part.

In some rare cases, your IVA may remain on your credit report beyond the six-year period, which could negatively affect your ability to obtain loans or mortgages. If this occurs, it is crucial to promptly contact the appropriate credit reference agencies to report the mistake and request an update.

They may require proof that your IVA term has ended, typically in the form of a completion certificate. As IVA Helpline, we recommend sending a copy of your completion certificate to all three credit agencies as soon as you receive it, ensuring your information is accurate and up to date.

Where can I get more advice on IVAs and other debt solutions?

Explore your financial options and receive the assistance you need to address your debt today by speaking to a friendly advisor at the IVA Helpline on 0800 464 7235 or check if you qualify online